Updates, advisories and surprises

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Communications Systems rises on Q3 outlook (3:01 PM ET) Communications Systems
CSII, -0.04%
is up 31 cents, or 5.2 percent, to $6.31, after the Hector, Minn., broadband technology firm forecast third-quarter earnings of 15 to 17 cents a share in sales of $28 million to $29 million. In the same period a year earlier, the company lost 2 cents a share on sales of $23.1 million. Communications Systems attributed the projected strong results to an increase of $5 million to $5.5 million in sales of media conversion products.

Milacron affirms Q3 loss outlook (1:57 PM ET) Milacron
MZ
is adding 38 cents, or 10.7 percent, to $3.93, after the Cincinnati plastic processing technology firm affirmed that its third-quarter results from continuing operations would meet its previously disclosed outlook. The company sees an after-tax loss of $5 million to $8 million on sales from continuing operations of $185 million to $200 million in the period. "New orders have stabilized - albeit at low levels - for the past four quarters now," said Ronald Brown, the company's chairman and chief executive officer. "While we have yet to see a strong recovery in our end markets, we are especially pleased that we have been able to strengthen our balance sheet significantly during the past quarter, which improves our liquidity and financial flexibility going forward."

Sovereign Bancorp meets Wall St.'s Q3 earnings view (1:39 PM ET) Sovereign Bancorp
SOV, +12.26%
is up 21 cents, or 1.6 percent, to $13.53, after the Philadelphia-based financial services firm reported third-quarter operating earnings of $93.1 million, or 33 cents a share, up from its year-ago equivalent profit of $72.8 million, or 28 cents a share, in line with the average estimate of analysts polled by Thomson First Call. The company also said that it remains comfortable with its allowance for loan losses approaching $300 million, and that it believes its credit quality remains stable.

Silgan issues warning for second half (12:03 PM ET) Silgan Holdings
SLGN, +1.33%
is slumping $6.50, or 24.6 percent, to $19.93, after the Stamford, Conn., maker of consumer goods packaging products forecast earnings of $1.30 to $1.35 per share in the third quarter, below its previous projection for a profit of $1.40 to $1.60 per share. Analysts polled by Thomson First Call are looking for earnings of $1.37 per share in the period, on average. Silgan cited lower than expected profit levels in the plastic container business and in its White Cap joint venture for the shortfall. The company expects these conditions to continue to impact its results in the fourth quarter. It now sees earnings of $2.70 to $2.90 per share in the fourth quarter, below its previous projection for a profit of $2.85 to $3.05 per share.

Hughes tops Q3 EBITDA est., but cuts full-year outlook (10:44 AM ET) Hughes Electronics
GMH
reported EBITDA (earnings before interest, taxes, depreciation and amortization) that exceeded expectations and revenue that was in line, but lowered full-year forecasts as the slumping telecommunications market and the devaluation impact of DirecTV Latin America more than offset raised expectations for DirectTV. EBITDA for the quarter ending September was $243.5 million, up from $76.5 million in the same period a year earlier. Revenue for the period increased 5.3 percent, to $2.2 billion. Analysts surveyed by Multex had anticipated EBITDA of $230.1 million and revenue of $2.2 billion, on average. For the full year, the company now expects EBITDA of $750 million and revenue of $8.9 billion to $9 billion, versus prior forecasts of $750 million to $850 million and $9 billion to $9.2 billion, respectively. The stock is sliding 53 cents, or 6.1 percent, to $8.23.

Milacron rallies after reiterating Q3 outlook (10:31 AM ET) Shares of Milacron
MZ
are rallying 29 cents, or 8.2 percent, to $3.84 after the supplier of plastics-processing technology reiterated its third quarter earnings and revenue forecasts. On July 24, the company had said it expected to record an after-tax loss of $5 million to $8 million and revenue of $185 million to $200 million for the quarter ending September. The company added that it had lowered its net-debt-to-capital ratio to the "low 30 percent range" from the "mid 50 percent range."

Pemco Aviation says $5M in revs to move to Q4 from Q3 (10:20 AM ET) Pemco Aviation Group
PAGI
is slipping 28 cents, or 1.7 percent, to $16.61, after the Birmingham, Ala., firm said that roughly $5 million in revenue would be moved to the fourth quarter from the third quarter due to Hurricane Isidore. The company sees earnings before interest, taxes, depreciation, and amortization, or EBITDA, of about $19 million and revenue of roughly $160 million for 2002. In 2002, Pemco sees EBITDA of $25 million and revenue of $170 million. In addition, the company said that its board has approved an offer to exchange new debt ssecurities for up to 2 million shares of its outstanding common stock. The new securities would be issued with a face amount of $22 per share of common stock. Pemco also said it plans to effect a four-for-one split of its common stock when the exchange offer is completed.

Chiron sees Q3 earnings ahead of views (9:16 AM ET) Chiron
CHIR
is anticipating that it will exceed Wall Street's consensus estimate for the third quarter due to an improved performance in all of its business units. The Emeryville, Calif., pharmaceutical firm is forecasting pro forma earnings of 45 cents a share for the third quarter, well ahead of the average estimate of analysts polled by Thomson First Call for a profit of 32 cents a share. Looking ahead, the company expects pro forma earnings of $1.25 to $1.30 per share for the year, ahead of a previous projection for earnings of $1.10 to $1.20 per share. The shares closed Friday at $38.55, up 1.5 percent.

ASV lowers earnings outlook for 2002 (9:03 AM ET) ASV Inc.
ASVI
is lowering its outlook for 2002 due to weakened construction equipment sales and overall soft market conditions. The Grand Rapids, Mich., firm now sees earnings of 12 to 16 cents a share on sales of between $43 million and $47 million in 2002, below the average estimate of analysts polled by Thomson First Call for a profit of 31 cents a share. Looking ahead, the company sees earnings of 32 to 44 cents a share on sales of $55 million to $65 million in 2003. The stock closed Friday at $7.25, up 4.7 percent.

Concord posts Q3 pro forma profit of $521,000 (8:39 AM ET) Concord Communications
CCRD, -5.54%
is reporting third-quarter pro forma earnings of $521,000, or 3 cents a share, up from its year-ago equivalent loss of $1.7 million, or 9 cents a share, and a penny ahead of the average estimate of analysts polled by Thomson First Call. Revenue at the Marlboro, Mass., provider of telecommunications software products rose 6 percent to $23.1 million in the latest three months from $21.8 million in the same period a year earlier. Looking ahead, Concord said it expects "revenue and profitability for Q4 to be similar to Q3 results." The stock closed Friday at $6.22, up 18 percent.

Eaton tops Q3 earns, revenue forecasts (8:23 AM ET) Eaton
ETN, +0.04%
reported third quarter results that exceeded expectations, and indicated that fourth quarter earnings may top analyst estimates. Net income for the quarter ending September was $93 million, or $1.30 a share, up from $40 million, or 57 cents a share in the year-earlier period. Excluding unusual items, earnings were $1.26 a share. Revenue for the period rose 4.6 percent to $1.83 billion. Analysts surveyed by Thomson First Call had been expecting earnings of $1.21 a share and revenue of $1.78 billion. The diversified industrial manufacturer acknowledged that the recovery in its end markets that it anticipated would begin in the fourth quarter would be delayed. Nevertheless, the company expects fourth quarter earnings to be 90 to $1 a share, versus analyst forecasts of 90 cents a share. Eaton also narrowed its full-year outlook to $4.30 to $4.40 a share, versus expectations of $4.27 a share. The stock closed Friday up $2.25 at $65.31.

Airborne cuts Q3 outlook (8:11 AM ET) Airborne
ABF, +1.60%
indicated that third quarter results would fall short of expectations, as higher fuel and aircraft maintenance costs and increased transportation purchased costs offset improved domestic shipping volumes. The package delivery company now expects to breakeven or lose 6 cents a share in the quarter ending September, versus the average analyst estimate compiled by Thomson First Call of a profit of 8 cents a share. The company added that it would take a $3.1 million non-cash charge for the early retirement of aircraft. The stock closed Friday up 43 cents at $11.76.

Correct: Shaw meets Q4 earns est., cuts 2003 outlook (7:59 AM ET) The Shaw Group
SGR, +4.00%
reported fiscal fourth quarter earnings that met expectations and revenue that exceeded estimates, but lowered its 2003 outlook to reflect the downturn in the domestic power generation market. Earnings for the quarter ending August were $31.3 million, or 70 cents a share, up from $19.3 million, or 45 cents a share. Revenue for the period increased 224 percent to $1.2 billion. Analysts surveyed by Thomson First Call had been expecting earnings of 70 cents a share and revenue of $962.7 million. For fiscal 2003, the company now expects to earn $1.92 to $2.08 a share, versus analyst expectations of $2.50. Shares of the provider of engineering services closed Friday down 70 cents at $10.60. (This replaces an earlier item that incorrectly stated the 2003 analyst earnings estimate.)

Peets perks up third-quarter estimates (7:47 AM ET) Peet's Coffee & Tea
PEET
said it expects third quarter earnings to be at the high end of analysts' estimate range of 8- to 10 cents per share. Currently, the consensus is for earnings of 9 cents per share, according to Thomson First Call. The company said it expects 2002 earnings near the high end of its 35- to 40 cents per share guidance and revenue growth in the 10 percent range. Analysts are execting earnings of 38 cents per share. The company reports on Oct. 30. Shares of Peet's rose 20 cents to $12.20 on Friday.

Andrx mulls charge on unfavorable drug ruling (7:40 AM ET) Andrx
ADRX
said a judge ruled against its generic version of the Astra Zeneca ulcer medicine, Prilosec, and that it's planning to appeal the decision. Shares in AstraZeneca Plc surged about 14 percent in London. The court ruled that Astra patents are valid, and that the bioequivalent version of Prilosec developed by Andrx, as well as the products developed by Genpharm and Cheminor Drugs infringe those patents. Only the Andrx product has received final marketing approval by the United States Food and Drug Administration. The company said the drug launch has cost it about $65 million and that it's mulling a third-quarter charge related to those expenses. Shares of Andrx fell 73 cents to $19.99 on Friday.

A.O. Smith's Q3 earns, full-year outlook tops ests. (7:15 AM ET) A.O. Smith
AOS, +0.48%
reported third-quarter earnings that exceeded expectations and raised its full-year outlook, helped by continued cost reduction initiatives and the integration of the State Industries acquisition. Net earnings for the quarter ending September were $10 million, or 34 cents a share, up from $400,000, or 2 cents a share and above the average analyst estimate compiled by Thomson First Call of 31 cents a share. Revenue for the period rose 31 percent to $352.4 million. The electric motor maker said it now expects to earn $1.80 to $1.85 a share for the year, above consensus analyst estimates of $1.79. The stock closed Friday up $1.35 at $27.35.

Adtran's Q3 earns top recently raised expectations (6:44 AM ET) Adtran
ADTN, -1.52%
reported third quarter earnings that were above recently revised expectations, citing increased operating efficiencies and market share gains. Pro forma earnings for the quarter ending September, which excludes an impairment charge, was $10.3 million, or 27 cents a share, up from $4.98 million, or 13 cents a share in the same period a year ago. Revenue for the period fell 7.7 percent to $88.2 million. On Oct. 3, the supplier of transmission product for the telecommunications industry said it expected to report earnings of 24 to 26 cents a share and revenue of $88 million. The stock closed Friday up 43 cents at $21.01.

ADC Telecom reaffirms Q3 forecasts (6:31 AM ET) ADC Telecommunications
ADCT
said reaffirmed its fiscal fourth quarter loss estimate and said it expected to report sequential improvement after the fiscal first quarter due to its "aggressive plans" to reduce its breakeven point. The broadband services company still expects to lose 7 to 9 cents a share in the quarter ending October on of "around $200 million." Analysts surveyed by Thomson First Call are currently expecting a loss of 9 cents a share and revenue of $201 million. ADC acknowledged, however, that the timing and the rate of recovery from depressed industry conditions continued to be uncertain. The stock closed Friday up 2 cents at $1.29.

Knight Ridder meets Q3 earns, revenue expectations (6:23 AM ET) Knight Ridder
KRI, -1.34%
reported third quarter results that matched expectations as a decline in its contribution from its newsprint mill investments was offset by increased operating income from low newsprint prices and a rise in total advertising revenue in September. Net income for the quarter ending September was $56.5 million, or 67 cents a share, up from 65 cents a share in the year-earlier period. Excluding non-recurring items, earnings were 81 cents a share. Total revenue slipped 0.6 percent to $689 million. Analysts surveyed by Thomson First Call had been expecting earnings of 81 cents a share and sales of $687.8 million, on average. Looking ahead, the newspaper publisher expects the current consensus earnings estimates of $1.14 for the fourth quarter and $3.46 for the year are "do-able." The stock closed Friday up $1.62 at $55.18.

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